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Dummy Variables (Dummy Variables (Nature of Dummy Variables (Examples:…
Dummy Variables
Dummy Variables
Nature of Dummy Variables
Examples: Kroger, Medicare, Auto Insurance, Sports
Can appear on Explanatory or Response side
Previous: Quantitative, Now: Qualitative
Qualitative Data in ANOVA
Dummy as sole Explanatory Variable
Dummy Variable Trap
Coding into dummy variable form
Reference/Baseline group
Region subgroups coded
Estimated Coefficients
Dummy Variable Effects by Region
Visual
Dummy with Quantitative Explanatory Variable
Modelling quiz average on Gender and Logins
Prediction with coefficients
Visual of Dummy Variable Effect
Interaction variable (Changes slope): Gender*Logins
Dummy as Response Variable
Two Types: LPM and Logit
Quicken Loans Example
Linear Probability Model (LPM)
Example: Outcomes of NCAA B-ball matchups
Predictions & Flaw
Visual and Slope
Logistic Model (Logit)
Using ML method with NCAA Example
Predicting with Logit
Visual of all predicted probabilities
Future predicted probabilities
Classification & Comparison
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All Rights Reserved by Brent Marinan & University of Arizona
